Private sector welcomes rise in capital expenditures; UNP Chairperson criticizes VAT on electricity consumption

Kathmandu / May 30: President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Anjan Shrestha, has expressed his hope that a rise in capital expenditure will help revitalize the private sector.

Describing the government’s decision to increase the size of capital expenditure in the budget speech for the fiscal year 2083-84 BS (2025-26) as a positive step, the FNCCI President was of the view that even a modest rise would contribute to making the private sector more dynamic and, in turn, strengthen the overall economy.

Speaking at the 19th AGM of Nepal Land and Housing Developers’ Federation here on Saturday, he welcomed the announcements to increase the expenditure for infrastructure sector, to reduce income tax and focus on IT.

He underlined the need to end the situation forcing a large number of Nepalis to seek foreign employment and to import up to 70 percent of consumer goods. “It is indeed encouraging that the budget allows foreign citizens to purchase houses in Nepal on a lease, with the vision of developing well-planned and systematic cities”.

At the programme, Shrestha also reiterated that the FNCCI remains committed to addressing the concerns of the real estate sector.

Federation Chair Bishnu Prasad Ghimire said the budget’s emphasis on an integrated urban development is positive.

Confederation of Nepalese Industries (CNI) President Birendra Raj Pandey urged the government to introduce more measures for making the economy more vibrant while senior vice Chair of Nepal Chamber of Commerce, Deepak Malhotra, said the private sector is hopeful from the incumbent government which has provided stability after a prolonged period of uncertainty.

“The announcement to allocate around Rs 400 billion budget for physical infrastructure development is welcoming,” he said.

UNP Chairperson Ghising criticizes govt’s decision to slap 5 pc VAT on electricity consumption

Chairman of Ujyalo Nepal Party Kulman Ghising urged the government to immediately revoke its decision to slap 5 percent value added tax (VAT) on the consumption of electricity by the general public.

Ghising, who is also a former energy minister and executive director of the Nepal Electricity Authority, criticized the government’s decision to impose 5 percent VAT on consumers who consume more than 50 units of electricity per month. The budget for the Fiscal Year 2026/27 has introduced the policy which is against the interests of citizens and the country, according to Ghising.

Ghising, who is attributed to making the country load-shedding-free, expressed the view on Saturday, the next day of the budget announcement. “While the government talks about increasing consumption of electricity produced within the country, the government has rather taken steps to discourage the use of electricity. This may reduce the use of appliances such as electric stoves and increase dependence on LP gas again, which is not compatible with the goals of national energy security, reducing trade deficits and building a green economy.”

Ghising added that increasing domestic consumption of electricity is the need of the day. For this purpose, the electricity tariffs should be made fairer, progressive and consumer friendly, but not adding new tax burdens. “Therefore, I strongly request the government to immediately withdraw this additional five percent VAT tax imposed on electricity consumers for the use of indigenous electricity, promotion of clean green energy and the welfare of common consumers.”